A sharp sell-off that took Bitcoin down more than $3,000 in roughly two hours, with the move framed as enough to wipe weekend gains. The slip tied the downside momentum to a collapse in sentiment, returning to an Extreme Fear. CoinGlass totals showing more than 136,000 traders liquidated over the past 24 hours, roughly $458 million in total liquidations, with longs making up about 92% of the damage.
The Fear and Greed Index compresses multiple inputs into a single 0 to 100 score. The index leans on volatility, momentum and volume, social activity, Bitcoin dominance, and search trends, then classifies the result into bands like Fear, Greed, and Extreme Fear. A print of 5 sits near the bottom of the scale, which usually signals broad risk aversion, elevated volatility, and thin dip-bid behavior.
This is not a common level. The index has only hit this exact Extreme Fear level a handful of times since its 2018 launch, naming August 2019, June 2022, and an earlier February 2026 occurrence. The implication is not that history repeats perfectly, but that a 5 print tends to show up when positioning breaks, liquidity becomes one-sided, and marginal buyers step back.
Those historical moments share a similar mechanical pattern. A sharp spot move triggers liquidations. Liquidations turn into market sells on derivatives venues, which push spot lower again via hedging and cross-venue arbitrage. When that loop runs, sentiment indicators snap to extremes because volatility spikes while volume surges on down candles.
A 5 print often shows up around forced-positioning events, which can set up reflexive rebounds once liquidations taper off. The rebound mechanism is straightforward. When a large share of open long leverage gets wiped, selling pressure drops quickly because margin calls stop. At the same time, short-term traders may cover shorts into falling momentum, and market makers can widen spreads less aggressively.
That said, Extreme Fear can also persist during risk-off macro phases. If stablecoin liquidity weakens, ETF or large spot demand slows, or macro headlines drive repeated de-risking, then the market can stay in a “sell rallies” regime even with sentiment pinned low. In that setup, bounces tend to be shallower, and order books rebuild slowly.
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